Why Responsible Investment matters to Hg
Hg engages in Responsible Investment because it sits right at the core of our Purpose.
We are trusted to improve the future of millions of investors by building sustainable businesses for tomorrow. This is our purpose statement, our reason for being – it is how we see our place in society and our contribution to it. We are totally committed to this and it is embedded in everything we do, in every decision, every day and for every individual.
What this means in practice is that we look to grow sustainable businesses which are great employers and good corporate citizens, whilst also generating strong returns for the millions of pensioners and savers who are invested with us. Everyone at Hg is ultimately pulling together towards this goal.
This commitment supports the backbone of our investment philosophy and has helped us to determine a very focused approach, which has evolved over the last 20 years. Our focus is to invest exclusively in growing software and services businesses. We look to ensure that both our time and our capital, support the sustainable growth of these knowledge businesses.
These businesses then contribute to society by changing and modernising how their customers work, whilst providing quality employment opportunities for thousands of people worldwide, across innovative and growing sectors.
In turn we believe that responsible business practices help to generate superior long-term performance, captured as investment returns to our investors. In this way, all stakeholders’ goals align, with contributions to investors, the businesses themselves, employees, customers, suppliers, shareholders and wider society.
As with other operations and functions, we take an active interest in how our companies manage Environment, Society and Governance (ESG) risks and opportunities. It is much more than screening processes to ensure we do not invest in certain companies. We primarily seek controlling equity buyout investments because this means we can make an active contribution in decision-making processes and better ensure positive change. We encourage, stretch, measure and demonstrate best-practice to our portfolio companies – constantly striving for the highest ESG Standards.
Our sector focus and expertise also mean that we have a better understanding of which ESG metrics are most material to service and software companies. We focus on these metrics to help build world-class ESG practices across our portfolio and achieve most impact.
Finally, we actively champion this topic and talk about our approach openly both internally and externally. We want all our employees to be proud of what we do, because they should be, and we want our investors to be confident in our intentions when they commit capital to us for ten years or more. We also listen – feedback is important and we truly want our stakeholders to tell us where we can do more.
This is Hg’s commitment to Responsible Investment and I can say, with great confidence, that this is embedded into the purpose of everything we do, right through the whole firm.
Matthew Brockman Hg Managing Partner